I will assume readers of this case study are already convinced of the many commercial benefits of planning one’s export business. However I know many exporters treat the process in a limited fashion by maybe making detailed plans once a year just before the end of the financial or calendar year. I strongly believe there is no real start or conclusion as it is an on-going practice forming a normal part of successfully doing export business.

To illustrate this point I will describe how I managed my export plans. The example shown is based on working with fmcg consumer products. First some basic points. My company operated on a five year plan basis which meant planning the first year in detail, the second to fourth years in broad detail, and the fifth year based on a number of probabilities and possibilities. I was charged with providing my company with an agreed annual RONA (return on net assets).

Let‘s start with the process of setting up an initial five year plan. We operated on a calendar year basis so my plan had to be signed off by the board by late November. Any later and I would not have the funds in place to start the New Year running.

In the preceding June, I would receive the new broad Company guidelines for the new Plan period, These would include strategic statements on products and markets and any commercial issues to be addressed. Additionally I would receive key financial data – the central charge for each product, rates of exchange to be used and the RONA target for each market and my Region in general. As I operated as a cost centre, I would be setting pricing levels, marketing & sales activity etc.

So I had the period between June and November to create and finally to gain Plan approval. In theory a lot of time but in practice never enough because of the numbers of people to be involved and the detail to be worked through. In my last Regional responsibility I managed 54 markets with each requiring a separate individual plan. In practice the larger the market the more detail and attention.

During the months of July & August compilation of individual plans would take place. The starting point was always the same. We operated on a bottom-up policy so the first contributors were our market partners – agents & distributors. We strongly believed that they should be involved, not just for motivational reasons, but for one basic fact – if they don’t know what is going on, who does’.

We would provide our partners with a simple template for their input. Generally they would be asked for their views on the marketplace, its competitiveness, trends, our sales & marketing policies and any matter that will impact on our future business together. They would have the facility to add other comments as appropriate.

However this must not be solely a distant activity with responses emailed in. During the two month period I would meet face to face with all parties to review and discuss their responses. This was too important a matter to be left to remote means only. I would divide my 54 markets into clusters to suit logistics for all parties. Meetings would then be held in suitable group numbers and locations. I should note that all my partners were happy to pay for their travel costs and that I never had an absentee. If the boss could not attend then a suitable replacement was provided. With my key major markets I would visit them for one-to-one discussions.

By the end of August the round of discussions and compilation of data was completed. I now set about compiling each individual market plan. Generally I started with rolling out the shipment forecasts – by month for year one, and annually for the remaining four years. The next key step was the forward pricing of products and any planned tactical reductions such as discounts or rebates.

I was now in a position to calculate estimated product and total market sterling revenues having used the appropriate rates of exchange where necessary. The second step was to document all marketing & sales activity and cost each element. Now a gross return can be calculated for each market and totalled for the Region. Finally I would deduct my fixed & variable costs for the Region such as local branch office, staffing – office and market-based, and business expenses.

I would, generally by the end of September, be able to calculate my first RONA’s for the Region and maybe not surprisingly they would not be in line with the company target. Individual market adjustments would have to be made until the RONA was correct. My Regional plan would be submitted to the Board for approval by the end of October latest. Again the plans would not be accepted in full immediately so further adjustments would have to be made. As indicated earlier one ideally wished the Regional plan to be approved by end of November so funds are available to implement activity immediately.

Over the years I have met many export managers, from companies small and large who have the same complaint. Their planning process drags on into the new calendar year and they are unable to act. January becomes a dormant and frustrating period.

I noted at the beginning of this study that I believe the planning process is dynamic. In fact as one plan is approved work commences on the next. At every stage in the new plan year, one is reviewing progress against the current plan and adjusting activities and expectations accordingly. One is always learning. The plan is not filed away but becomes the source of all work and assessment including dialogue with market partners.

In reality the plan preparation period is not an isolated and concentrated period of activity. By the time the new plan is worked upon in July, there is already at least six months trading experience that can be used from that new year with lessons then being noted for the future.

This case study was not intended to show the best method of planning but purely demonstrate a way that worked well for my company and its business. It was an integral part of how we worked and how our overseas partners were involved continually in the process. The plan not only contributed to business success but to effective team-building.


Written 3rd Ocotber 2013 by Dick Brentnall S&H LLP Associate/ Trainer

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